Wednesday, July 15, 2009

The following individuals whose primary goal in life is getting tenure and publishing a textbook, yet believe they have a voice in deciding whether over 300 million American people should know just whose interests the Fed so staunchly protects, have issued an open letter to Congress and The Executive Branch, demanding that no one ever dare tinker or have audit powers over the private institution that is the Federal Reserve. Those who run hedge funds, operate semi-failed companies, work for an Investment Bank, especially taxpayer bailed out ones, or are otherwise conflicted, are highlighted in bold.

It makes sense to recall that the recent grassroots campaign to enforce the opposite - i.e., more transparency at the Fed, has been supported by over 5,000 individuals at this point. Zero Hedge recommends all who believe in transparency in this time when we have anything but, sign the petition to demonstrate their disagreement with the individuals below.

Robert Parry President & CEO, Federal Reserve Bank of San Francisco, Retired

Lubos Pastor University of Chicago BoothSchool of Business

Lasse H. Pedersen NYU

Monika Piazzesi Stanford

Keith Poole University of California, San Diego

Giorgio Primiceri Northwestern University

Valerie Ramey University of California, San Diego

Enrichetta Ravina Columbia University

Esteban Rossi-Hansberg Princeton University

Michael Rothschild Princeton University

Tano Santos Columbia Business

School Ulrike Schaede University of California, San Diego

Richard Schmalensee MIT

Martin Schneider Stanford

Kermit Schoenholtz NYU Stern School of Business

Jay Shanken Emory

Robert Shiller Yale University

Hyun Shin Princeton University

Stephen Shore Johns Hopkins University

Costis Skiadas Northwestern University

Matthew Slaughter Dartmouth College

James F. Smith Kenan-Flagler Business School, UNC-Chapel Hill

Chester Spatt Carnegie Mellon University

James H. Stock Harvard

Rene Stulz The Ohio State University

Amir Sufi University of Chicago Booth School of Business

Joseph Swanson Northwestern University

Vefa Tarhan Loyola University Chicago

Edwin M. Truman Peterson Institute for International Economics

Harald Uhlig University of Chicago

Andrey Ukhov Northwestern University

Sergio Urzua Northwestern University

Chris Varvares Macroeconomic Advisers, LLC

Pietro Veronesi University of Chicago

Paul Wachtel New York University, Stern School of Business

Richard Walker Northwestern University

Mark Watson Princeton

Shang-jin Wei Columbia

David Weil Brown University

Pierre-Olivier Weill UCLA Economics

Burton Weisbrod Northwestern University

William Wheaton MIT

Michael Whinston Northwestern University

Mirko Wiederholt Northwestern University

Mark Witte Northwestern University

Tiemen Wouteren Johns Hopkins University

Jonathan Wright Johns Hopkins University

Wei Xiong Princeton University

Stanley Zin New York University

And here is the text of the endorsed letter:

Open Letter to Congress and the Executive Branch

Amidst the debate over systemic regulation, the independence of U.S. monetary policy is at risk. We urge Congress and the Executive Branch to reaffirm their support for and defend the independence of the Federal Reserve System as a foundation of U.S. economic stability. There are three specific risks that must be contained.

First, central bank independence has been shown to be essential for controlling inflation. Sooner or later, the Fed will have to scale back its current unprecedented monetary accommodation. When the Federal Reserve judges it time to begin tightening monetary conditions, it must be allowed to do so without interference. Second, lender of last resort decisions should not be politicized.

Finally, calls to alter the structure or personnel selection of the Federal Reserve System easily could backfire by raising inflation expectations and borrowing costs and dimming prospects for recovery. The democratic legitimacy of the Federal Reserve System is well established by its legal mandate and by the existing appointments process. Frequent communication with the public and testimony before Congress ensure Fed accountability.

If the Federal Reserve is given new responsibilities every effort must be made to avoid compromising its ability to manage monetary policy as it sees fit.

The following individuals whose primary goal in life is getting tenure and publishing a textbook, yet believe they have a voice in deciding whether over 300 million American people should know just whose interests the Fed so staunchly protects, have issued an open letter to Congress and The Executive Branch, demanding that no one ever dare tinker or have audit powers over the private institution that is the Federal Reserve. Those who run hedge funds, operate semi-failed companies, work for an Investment Bank, especially taxpayer bailed out ones, or are otherwise conflicted, are highlighted in bold.

It makes sense to recall that the recent grassroots campaign to enforce the opposite - i.e., more transparency at the Fed, has been supported by over 5,000 individuals at this point. Zero Hedge recommends all who believe in transparency in this time when we have anything but, sign the petition to demonstrate their disagreement with the individuals below.

Robert Parry President & CEO, Federal Reserve Bank of San Francisco, Retired

Lubos Pastor University of Chicago BoothSchool of Business

Lasse H. Pedersen NYU

Monika Piazzesi Stanford

Keith Poole University of California, San Diego

Giorgio Primiceri Northwestern University

Valerie Ramey University of California, San Diego

Enrichetta Ravina Columbia University

Esteban Rossi-Hansberg Princeton University

Michael Rothschild Princeton University

Tano Santos Columbia Business

School Ulrike Schaede University of California, San Diego

Richard Schmalensee MIT

Martin Schneider Stanford

Kermit Schoenholtz NYU Stern School of Business

Jay Shanken Emory

Robert Shiller Yale University

Hyun Shin Princeton University

Stephen Shore Johns Hopkins University

Costis Skiadas Northwestern University

Matthew Slaughter Dartmouth College

James F. Smith Kenan-Flagler Business School, UNC-Chapel Hill

Chester Spatt Carnegie Mellon University

James H. Stock Harvard

Rene Stulz The Ohio State University

Amir Sufi University of Chicago Booth School of Business

Joseph Swanson Northwestern University

Vefa Tarhan Loyola University Chicago

Edwin M. Truman Peterson Institute for International Economics

Harald Uhlig University of Chicago

Andrey Ukhov Northwestern University

Sergio Urzua Northwestern University

Chris Varvares Macroeconomic Advisers, LLC

Pietro Veronesi University of Chicago

Paul Wachtel New York University, Stern School of Business

Richard Walker Northwestern University

Mark Watson Princeton

Shang-jin Wei Columbia

David Weil Brown University

Pierre-Olivier Weill UCLA Economics

Burton Weisbrod Northwestern University

William Wheaton MIT

Michael Whinston Northwestern University

Mirko Wiederholt Northwestern University

Mark Witte Northwestern University

Tiemen Wouteren Johns Hopkins University

Jonathan Wright Johns Hopkins University

Wei Xiong Princeton University

Stanley Zin New York University

And here is the text of the endorsed letter:

Open Letter to Congress and the Executive Branch

Amidst the debate over systemic regulation, the independence of U.S. monetary policy is at risk. We urge Congress and the Executive Branch to reaffirm their support for and defend the independence of the Federal Reserve System as a foundation of U.S. economic stability. There are three specific risks that must be contained.

First, central bank independence has been shown to be essential for controlling inflation. Sooner or later, the Fed will have to scale back its current unprecedented monetary accommodation. When the Federal Reserve judges it time to begin tightening monetary conditions, it must be allowed to do so without interference. Second, lender of last resort decisions should not be politicized.

Finally, calls to alter the structure or personnel selection of the Federal Reserve System easily could backfire by raising inflation expectations and borrowing costs and dimming prospects for recovery. The democratic legitimacy of the Federal Reserve System is well established by its legal mandate and by the existing appointments process. Frequent communication with the public and testimony before Congress ensure Fed accountability.

If the Federal Reserve is given new responsibilities every effort must be made to avoid compromising its ability to manage monetary policy as it sees fit.